Improve education, but don’t fund more waste

Recent arguments in favour of a large increase in school funding have cited the ‘Gonski’ report and OECD research showing a long-term economic return on investment in education. However, close scrutiny reveals that they do not provide strong justification in the current Australian context.

The Gonski report found that funding for schools was complex and inefficient. It recommended a complete overhaul of school funding that required a new agreement between the federal, state and territory governments. The increase in federal funding that is attributed to the ‘Gonski model’ was not inherent in the Gonski committee’s recommendations — a point confirmed by David Gonski himself.

The implications of international research on education spending and economic growth are also far from straightforward. The largest pay-offs from increased education spending are in developing countries where increased spending is from a low base and often means providing decent primary school education where none existed previously. This is a very different prospect to increasing spending where funding and provision are already high.

A big assumption in imputing economic returns to education spending is that higher spending will lead to better quality of education and hence better outcomes. This is by no means guaranteed. Economists surveyed in the latest Economic Society of Australia poll made this case repeatedly. While a majority of the economists surveyed agreed that education spending is on balance more likely to have a long term dividend than a company tax cut, neither policy was given an unequivocal endorsement in terms of future benefits.

While there are undoubtedly some schools around Australia that are under-resourced, it would be a mistake to conclude that this is purely a function of the size of the government’s education budget rather than the way it is managed. Large amounts of education funding sometimes never reach schools and even more is spent on policies and programs that don’t work. There may be a case for increased school funding as a rock solid investment in the future, but it can’t be made while there is so much waste in the system at present.

Dr Jennifer Buckingham is a senior research fellow and director of the FIVE from FIVE reading project.